2018 Tax Law to Reduce Pipeline Expansion Recourse Rates

FERC staff has asked gas pipelines with pending expansion applications how 2018 tax law changes will impact their proposed project’s cost of service and the project’s proposed incremental rates.  FERC has imposed a quick, three business day turnaround on responses. In identical data requests sent to a number of pipelines within the last week, FERC notes that effective January 2018, the Tax Cuts and Jobs Act of 2017 reduced the federal corporate income tax rate to 21 percent and allows certain investments to receive bonus depreciation treatment. 

It asks pipelines to explain how these changes impact the proposed project cost of service and the resulting initial recourse rate proposal. Finally, it asks the pipelines to provide an adjusted cost of service and recalculated an initial incremental rate. Pipelines with pending expansion applications who have received this data request include: Columbia Gas Transmission, LLC, Florida Gas Transmission Company, LLC, Gulf South Pipeline Company, L.P., Paiute Pipeline Company, Southern Natural Gas Company, Texas Eastern Transmission, LP, and WBI Energy Transmission, Inc.